Gold Technical Report: Gold prices witnesses a good rally last week but witnessed a correction on Friday. The selling continued on Monday to take the prices below the crucial 1800 mark. The medium-term trend will turn bullish if it reclaims 200 DMA @1796 on the Daily charts currently. The Major support stands at 50 DMA @1703. The short-term Stochastics Oscillator is at 57 and the Relative Strength Index is at 58.
Silver Technical Report: The silver prices, parallel with gold prices marched up smartly last week and also yielded to selling pressure yesterday. The prices continue to trade above 200 DMA @21.27. On the downside, major support is only at 50 DMA @20.24, crossing below which may change the medium-term trend into negative. The Short term Stochastics Oscillator is at 65 and the RSI momentum is near 60. Both these indicators signal little overbought positions.
Fundamental Report: Chairman Powell’s speech last week, caused extreme volatility leading to a dynamic price spike in both precious metals. Market participants immediately reacted to Powell’s speech by focusing on the fact the Federal Reserve was planning to slow the pace of interest-rate hikes. However, today they seemed to disregard Powell’s remarks about how the Federal Reserve would slow the pace of rate hikes. They changed their focus to the fact that the Federal Reserve is maintaining an extremely hawkish demeanor with more rate hikes at a slower pace. In other words, market participants focused on the time it would take the Federal Reserve to lower inflation to its target rate rather than the fact that the Fed intends to slow down the size of individual rate hikes. But the jobs report raised doubts over whether the Fed can afford to change its aggressive monetary policy tightening, encouraging investors to book profits and driving prices lower into the close. Gold traders fear the Fed could raise rates higher over the long run. This notion was supported by a Fed official. Chicago Fed President Charles Evans stated at an event that there could be “a slightly higher peak rate of the fund’s rate, even as we likely will step down: the pace of rate hikes from 75 BPD.”